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On December 12, 2013, the US Department of Energy awarded $226 million to an Oregon company, NuScale, to design, develop, and prepare for licensing review its first small-scale nuclear reactor. A grant for a similar invention was made in 2012 to Babcock & Wilcox, a company with long experience building reactors for nuclear submarines. A number of companies worldwide are exploring these cutting-edge power generators, and some experts view them as the answer to a host of problems that currently beset the nuclear industry, including the high cost of constructing reactors, the risk of catastrophic accidents, and the potential for bomb-making material to proliferate.

The chief difference between a small-scale reactor and a traditional one is physical size and therefore output. They can be built on less than four acres, compared to the usual 20 acres for existing plants. And while the industry standard has an output of approximately 1 gigawatt of electricity (GWe), the small models produce less than 300 megawatts.

Now, today’s very large 1 GWe power plants are sure to be replaced by something else over time. It’s not clear, though, that the size of those plants is the cause of the problems. And if size isn’t the cause, smaller power plants may not be the answer. In November 2013, technical experts from the nuclear industry, government agencies, and independent regulatory bodies gathered in Villingen, Switzerland for an international workshop on small modular reactors convened by Carnegie Mellon University and the Paul Scherrer Institute. As they reviewed current proposals for small reactors, assessed the advantages, and discussed barriers to deployment, it became clear that these experts were pursuing sometimes disparate goals.

The major impetus for building small nuclear plants is the need to reduce the up-front capital costs of constructing power stations. This problem is most keenly felt in the United States, where the price of construction has risen so high that private investors are no longer interested in funding new projects. Not one nuclear plant has been permitted and then completed in the United States since 1979 (although four are currently under construction), even though nuclear power provides only 20 percent of US electricity. The other spur to building small modular plants is to provide power to rural and remote areas far from major power grids, where demand for electricity is low.

On one hand, then, because the plants are much smaller, the upfront cost of building each one will be lower. On the other hand, to provide the same amount of electricity as a 1 GWe plant, companies would have to construct some 20 smaller plants. So proponents speak of “economies of volume” rather than “economies of scale.” But, although the initial capital required to build one plant will be lower, in fact, the price of electricity produced by the smaller reactors will likely be higher, because capital construction costs for the smaller plants will be higher, relatively speaking, than for larger plants.

Proponents of smaller nuclear power plants argue that they will reduce the risk of core meltdowns from loss of power or terrorist attacks, thanks to their proposed placement below ground as well as new design features that do not rely on human operators for safety. In the event of an accident or deliberate attack, the resulting meltdown could be better contained, or so the theory goes. But while placing a smaller plant underground might reduce the risk of atmospheric dispersal of radionuclides following an accident, that below-grade siting might hamper clean-up operations and be more likely to contaminate ground water. And the safety features that small-reactor designers have proposed—based on forces of physics like gravity, convection, and conduction rather than human intervention—could also be used in a large 1 GWe plant.

One advantage of smaller plants is that their major components could be fabricated in a permanently located factory and then shipped to be assembled onsite. Engineers and skilled construction workers would remain in one place where companies could count on them to be consistently available. That would lower labor costs and provide steady employment in specific locations. As things stand now, workers travel to major construction sites for several years at a time, only to have to move to work on the next plant. The factory-built modular reactors offer real advantages for developing and retaining skilled labor.

While this build-and-ship model would be an advantage in the United States, though, the nuclear industry is global, and in developing countries, where demand for energy is growing rapidly, officials are already expressing reservations. Small modular plants that can be manufactured and partially assembled in the United States, Europe, or Russia, then transported overseas to be finished onsite, will ensure that high standards for design, safety, and security are maintained. But by accepting ready-made modular reactors and fuel assemblies, developing countries will miss out on opportunities to train their workers in nuclear power plant construction and fuel fabrication, and thus not be able to develop expertise of their own. At the meeting, it became clear that most customers wouldn’t be interested in build-own-operate agreements with foreign manufacturers. Localization is important to them.

Since the highest risk of weapons proliferation comes from fuel enrichment, a technology that many countries wish to acquire whether or not they also buy small reactors, the spread of modular reactors will not necessarily reduce weapons proliferation.

Without a clear-cut case for their advantages, it seems that small nuclear modular reactors are a solution looking for a problem. Of course in the world of digital innovation, this kind of upside-down relationship between solution and problem is pretty normal. Smart phones, Twitter, and high-definition television all began as solutions looking for problems.

In the realm of nuclear technology, however, the enormous expense required to launch a new model as well as the built-in dangers of nuclear fission require a more straightforward relationship between problem and solution. Small modular nuclear reactors may be attractive, but they will not, in themselves, offer satisfactory solutions to the most pressing problems of nuclear energy: high cost, safety, and weapons proliferation.

Editor's note: This article was corrected on Feb. 6, 2014 to reflect that no nuclear plant has been permitted and then completed in the United States since 1979. Some nuclear plants approved for construction earlier have been completed, post-1979.